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The potential implications of environmental deterioration on business and non-business visitor expenditures in a natural setting

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  • Putu Liza Kusuma Mustika

    (James Cook University, Australia)

  • Natalie Stoeckl

    (James Cook University, Australia)

  • Marina Farr

    (James Cook University, Australia)

Abstract

Nature-based tourism can be an important source of income for regional economies but relies on a healthy environment. Using data collected from business and non-business visitors to Australia’s coast adjacent to the Great Barrier Reef, the authors generate estimates of the potential financial impact of environmental degradation, demonstrating a novel way of testing and controlling for hypothetical response bias. More than 90% of non-business visitors and 67% of business visitors came to the region for at least one nature-related reason. Average daily expenditure was similar for both visitor segments (≈AUD$190), but the determinants of expenditure varied. All visitors reacted much more negatively to the prospect of environmental degradation than to a 20% increase in (local) prices, although business visitors were much less responsive than non-business visitors. Adjusting for hypothetical response bias, the authors estimate that substantial environmental degradation could reduce visitor expenditures (and thus local tourism incomes) by at least 17%.

Suggested Citation

  • Putu Liza Kusuma Mustika & Natalie Stoeckl & Marina Farr, 2016. "The potential implications of environmental deterioration on business and non-business visitor expenditures in a natural setting," Tourism Economics, , vol. 22(3), pages 484-504, June.
    • Handle: RePEc:sae:toueco:v:22:y:2016:i:3:p:484-504
    DOI: 10.5367/te.2014.0433
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    References listed on IDEAS

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    Cited by:

    1. Stoeckl, Natalie & Condie, Scott & Anthony, Ken, 2021. "Assessing changes to ecosystem service values at large geographic scale: A case study for Australia’s Great Barrier Reef," Ecosystem Services, Elsevier, vol. 51(C).

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